Services Sector Development and Improving Production Network in ASEAN

While the importance of services sector in creating value added and employment has been recognized, the role of services as providers of major inputs to production sector are often forgotten and overlooked. This paper stresses the importance of services sector in supporting economic activities in general; the role that has become increasingly more critical in the wake of global production network. It argues that development of the services sector is crucial to supporting an economy’s participation in networks of production and in promoting industrial upgrading. Within that context, this paper provides insight on the direction of services development in ASEAN countries and those countries can benefit by supporting greater services integration across the region.